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Forum List » Business News and Headlines SEC Filings, Earing Reports, Press Releases  
Simpson Manufacturing Co. Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: August 8, 2012 03:24PM
Simpson Manufacturing Co. Inc. (SSD) filed Quarterly Report for the period ended 2012-06-30. Highlight of Business Operations:For the second quarter of 2012, net sales increased 2.2% to $181.7 million compared to net sales of $177.8 million for the second quarter of 2011. The Company had net income of $15.9 million for the second quarter of 2012 compared to net income of $19.5 million for the second quarter of 2011. Diluted net income per common share was $0.33 for the second quarter of 2012 compared to diluted net income of $0.39 per common share for the second quarter of 2011.The increase in the Company’s second quarter 2012 sales was due to $9.7 million in sales from acquisitions. Excluding sales from acquisitions, the Company’s second quarter 2012 sales decreased. In the second quarter of 2012, sales increased in North America, with a 4.6% increase in the United States, due in part to recent acquisitions and a slight increase in Canada. Sales in Europe decreased in the second quarter of 2012, particularly in France which was down 20.8%, but partly offset by sales from the recent European acquisition. The decrease in sales was primarily due to the European financial crisis which negatively affected sales volumes. Effects of foreign currency translation were not significant. Sales to contractor distributors and lumber dealers increased in the second quarter of 2012, compared to the second quarter of 2011, while sales to dealer distributors were flat. Sales to home centers decreased 6.0% in the second quarter of 2012, compared to the second quarter of 2011, but sales to our largest customer increased 12.2% for the same periods. Wood construction product sales, including connectors, truss plates, fastening systems, fasteners and shearwalls, represented 85% of total Company sales in the second quarter of 2012, down from 90% in the second quarter of 2011. Concrete construction product sales, including adhesives, chemicals, mechanical anchors, powder actuated tools and reinforcing fiber materials, as a percentage of total sales increased to 15% in the second quarter of 2012, from 10% in the second quarter of 2011. The majority of sales from recent acquisitions were attributed to the European acquisition, and mostly in concrete construction products. In the first half of 2012, net sales increased 9.7% to $340.4 million compared to net sales of $310.3 million for the first half of 2011 due in part to recent acquisitions. The Company had net income of $23.1 million for the first half of 2012 compared to net income of $26.6 million for the first half of 2011. Diluted net income per common share was $0.48 for the first half of 2012 compared to diluted net income of $0.53 per common share for the first half of 2011. As of June 30, 2012, working capital was $394.7 million as compared to $480.5 million at June 30, 2011, and $430.5 million at December 31, 2011. The decrease in working capital from December 31, 2011, was primarily due to decreases in cash and cash equivalents of $51.1 million and assets held for sale of $6.8 million, and increases in trade accounts payable of $12.8 million, accrued cash profit sharing of $6.9 million, accrued liabilities of $5.3 million, current portion of notes payable of $4.8 million, and income taxes payable of $1.4 million. The decrease in cash and cash equivalents was primarily due to the recent European acquisition for $50.7 million, net of cash received of $6.8 million, and the recent North American acquisition for $5.3 million, net of contingent consideration of $0.2 million, partly offset by the sale of real estate in North America for $6.4 million, net of closing costs, which also accounted for the decrease in assets held for sale. The increase in trade accounts payable was primarily due to purchases of raw materials, which replaced stocks converted into finished goods, while the increase to accrued cash profit sharing and accrued income taxes payable was due to higher operating profits in the second quarter of 2012, compared to the fourth quarter of 2011. The increase in accrued liabilities was primarily due to the recent European acquisition and the acquisition of a Canadian truss plate customer list. The increase in notes payable was attributable to the recent European acquisition and was for purchasing raw materials during the first half of 2012. These decreases in working capital from December 31, 2011, were partly offset by an increase in net trade accounts receivable of $43.7 million, an increase in inventory of $5.1 million, an increase in other current assets of $1.4 million and a decrease in accrued cash profit sharing trust of $2.1 million. The increase in net trade accounts receivable was primarily due to seasonal increases in net sales during the second quarter of 2012 compared to the fourth quarter of 2011. The increase in inventories was primarily due to the recent European acquisition. The decrease in accrued profit sharing trust was due to the 2011 contribution being paid in the first quarter 2012, compared to the 2010 contribution being paid in the third quarter of 2011. The balance of the change in working capital was due to the fluctuation of various other asset and liability accounts, none of which was individually material. The working capital change and changes in noncurrent assets and liabilities, combined with net income of $23.1 million and noncash expenses, primarily charges for depreciation, amortization, stock-based compensation and impairment of assets held for sale totaling $19.6 million, resulted in net cash provided by operating activities of $16.9 million. As of June 30, 2012, the Company had unused credit facilities available of $206.3 million, including a $200.0 million credit facility.
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